Marketing

Marketing

Learning Objectives

What is Marketing?

What is the marketing mix?

What is branding?

What is public relations (PR)

What is advertising?

What is the role of ethics in advertising?

Definition:

Marketing is the process of identifyingHuman needs and producing products

And services to satisfy them

Marketing Strategy

A plan setting out how a business will identify and satisfy customer needs

Marketing Strategy

Gap in market/ Market Segments

Target MarketProduct

positioningMarketing Mix

Marketing Strategy

Analysing the market

1. Market Segmentation

o Market Segment/ Niche: Group of people in which the product satisfies a similar need.

o Different needs require different marketing approaches

o Demographic segmentation – age/ income/ sex/ social class

o Psychological segmentation – attitudes /tastes

Marketing Segmentation

2. Target Market

o Target Market – Group of customers at which to aim a specific product

o Characteristics – Age

Gender

Income level

Lifestyle needs

3. Research – Product Positioning

o Product Positioning- Creating an image of the product in the customers mind.

Homework Pg 307 Answers

Q.1Name: Cost EffectiveExplain: Having an effective marketing concept in place saves a business money in the long term because instead of spending huge amounts of money on what they can make they identify consumer needs first and then develop the productExample: ipad

Name: Time ManagementExplain: Instead of spending time developing products businesses use their time more effectively by researching consumer needs and then develop the productsExample: Pepsi Max

Q.2

Niche Market: A niche market is a small market segment in which a specific product or service meets a small group of consumer needs.

Example: Bridal shoes

Q.3

Product positioning: This is when a business creates an image of the product in the consumer’s mind.

Example: Pepsi Max – Male segment ‘macho’ image

Product

Core Product – Main Function

USP - Feature distinguishing it from competitors

Augmented Product- Extras to help sell it. e.g. packaging/ guarantee

Product Design and quality

Function: Product must do what is supposed to do to satisfy target market core needs.

Form: Product must satisfy augmented needs In terms of extras. E.g. Image/ Style

Product life cycle

1. Introduction: Product is launched. Sales are slow. Focus on distribution – widespread availability

Advertising is key

2. Growth: Advertising leads to increase in sales Focus on production & quality control to meet demand

3. Maturity: Rate of increase in sales slows Find ways to update product/ provide sales promotion techniques

R&D of new products commences

4. Saturation: Sales have levelled off. Target markets are already buying the product

Can only increase sales by taking competitor’scustomers

New sales promotion techniques/ advertising/ R&Dneeded

5. Decline: Supply of product is greater then the demand of it Attempts to minimise costs by reducing spending on

advertsing to earn as much profit as possible.

* Coke Life cycle

Packaging

Protection – from damage during distribution

Presentation- Attractive to purchase

Information- Contains info about the product

Identity- Easily recognisable by consumers

Brand

Definition: is a product name which has been registered with the controller of Patents, Designs and Trade Marks and is protected against copying by competitors.

Patent:

o Is legal protection for a product or process.

o Must register product with patent office.

o The patent holder has exclusive rights to their product for 10 years

Trade mark:

o A sign representing a product/ service and can be recognised every where.

o Name/ Slogan/ Logo/ Colour/ Sound

Advantages of Brands

1. Identity: Makes the product more recognisable

2. Differentiation: Shows the differences that existsCompared to competitors products

3. Loyalty: Brand satisfaction develops trust inConsumers and they become loyal to that brand

4. New products: An established brand makesIt easier for the business to introduce new productsInto the market

Own BrandsDefinition: Brands registered by retailers

Benefits of own brands• The Retailer: Buys products more cheaply as

manufacturer is not advertising

• Consumers: Purchase cheaper products where the quality is expected to be at a minimum standard

• Producers: Get the products out to supermarket shelves without any marketing costs.

Price

Characteristics:

•Profit: Price must be set high enough to cover costs but make a profit

•Sales/ Demand: Lower the price = Higher the sales = higher profits

•Image: High price – good quality ; Low price – lower quality

Pricing strategies

1. Mark-up pricing: adding a % (mark-up) to the cost of the product and sell it at that price

2.Premium pricing: High price reflecting high quality,

Give impression of superior quality

3. Price Skimming: High price to cover high costs of developing new product.

4. Penetration pricing: Low price to enter highly competitive market to gain market share

5. Predatory pricing: Very low price to drive competitors out of the market. Can lead to ‘price war’

6. Price discrimination: Charging different prices to different market segments for the same product.

Factors influencing Price

ProfitDemand

Product Positioning

Competitors

price

Stage in product life cycle

Vat

Place• Getting products to consumers!

• Channels of distribution: route involved in getting product from producer to consumer.

Step 1: Wholesalers buy in bulk from the producer

Step 2: They store goods in warehouses and sell them on to retailers

Step 3: Retailers sell the goods in smaller quantities to consumers

A

Advantages to producer Disadvantages to producer

1. Producers sell off stock in large quantities & pass off responsibility of ‘breaking bulk’

1. Wholesalers will mark-up the price of goods. May make products uncompetitive.

2. Cost of transport & storage becomes wholesaler & Retailers responsibility

BStep 1: Large retailers purchase

directly from manufacturersStep 2: Retailers sell goods at

cheaper price to consumers

Own brand products are also produced for these retailers and online retailers

Advantages to producer Disadvantages to producer

1. Distribution simplified because wholesaler is bypassed

1. Large retailers expect large discounts for selling the producers stock reducing their profit margin

2. Using large retailers means producers can reach a mass market

CStep 1: Agents receive goods and

sell them on behalf of the producers

Step 2: The agent earns commission on goods sold

Advantages to producer Disadvantages to producer

1. Wholesaler and retailer are bypassed so profit margin increased

1. Difficult to reach mass market

D Producers sell directly to their customers

Advantages to producer Disadvantages to producer

1. Bypass other intermediaries allowing for increased profit margins

1. High focus on attracting customers instead of main focus on product itself

2.Develop good customer relationship

Factors influencing Distribution

Target market

Product Image

Ease of transport

Payment methods

Promotion

The way a business influences the target market to purchase their products

` How?

Advertising is the science of creating and placing media that Interrupts the consumer and then gets

him or her to take some Action.

Advertising

Functions of Advertising

Informative:Providing information about the function of the product/service.

Persuasive: Convincing consumers of the desirability and the benefits that set a particular product apart from the competition.

Generic:Promote the sale of a product but not a particular brand

Competitive:Comparing brands with each other showing why their product/service is better

E.G. Supervalu v Lidl & Aldi

Reminder:General adverts showing brands

Informative or Persuasive or Generic?

Informative or Persuasive or Generic?

Reminder or Persuasive or Generic?

Informative or Persuasive or Generic?

Informative or Persuasive or Generic?

Informative or Persuasive or Generic?

Informative or Persuasive or Generic?

Factors influencing choice of advertising

medium

Target marketAdverting budget

Aim of advert

INTERNET

Mediums of advertising

E-commerce:

•Selling goods or services over the internet is called e-commerce or e-business.

•The ‘e’ stands for ‘electronic’

•B2C is used to identify sales from a business directly to consumers.

• B2B indicates sales from one business to another. 

Websites

Social Media

Social media: •Also known as social networking and refers to a range of internet technologies that enable people to communicate and socialise online.

• Users can combine text, video and audio to create online messages, podcasts and status updates.

•E.G.S Facebook, Twitter and their increasing popularity in providing businesses with an opportunity to reach members of their target market.

Homework

Page 309

Q.3 Q.6 Q. 7

Answers

Question 3 1. Identity: Makes the product more recognisable

2. Differentiation: Shows the differences that exists compared to competitors products

3. Loyalty: Brand satisfaction develops trust in consumers and they become loyal to that brand

4. New products: An established brand makes It easier for the business to introduce new products Into the market

Question 6

1. Target market: This will influence whether the price will be set high or low taking into consideration their characteristics e.g age, income levels

2. Cost of production: A price must be set to cover the costs of producing the goods

3. Demand: The higher the demand for the product the higher the selling price

4. Product positioning: The image that the business are trying to portray to the public will effect pricing strategy. E.g. premium pricing.

Question 7:

In the channel of distribution there can be two intermediaries between the producer and the consumer. These are the wholesaler and the retailer.

Benefits of intermediaries:

• The wholesaler/ Retailer buys in bulk from the producer so they become the ones responsible for ‘breaking bulk’.• They incur the costs of transport and advertising to the consumer•Allows distribution of products to a mass market. Increasing sales, increasing profits

Benefits of selling directly to consumer:• Earns extra profit for the producer because they can charge higher price to the consumer as wholesaler and retailer are not taking a cut•Consumers can custom order goods to their specifications•Develop positive relationship with the consumers increasing customer loyalty

How to execute an advertising campaign

Step 1: Analyse•Collect & analyse market research of market segments and target market

Step 2: Plan•Identify aims of advert•Decide budget of adverting•Decide on media mix to be used•Evaluate cost effectiveness

Step 3: Implement• Design adverts • Produce adverts• Book advert slots• Decide on timing to showcase adverts to maximise impact

Step 4: Review• Effects on sales levels• Effects on consumer attitudes – market research• Make improvements

Laws in Advertising

ASAI- Advertising Standards Authority in Ireland

Ads must be:

Legal Decent

Honest Truthful

Office of Director of Consumer Affairs

Withdraws false / misleading ads

Prosecutes sellers who use false/ misleading ads

Sales Promotion

• Offers consumers an incentive to buy product/ service

• Used at Introduction, maturity saturation and decline phases

• Aim: Switch brands – build loyalty

Merchandising

• Point-of-sales displays: Attract attention

• E.G. Free samples

• Encourages ‘Impulse buying’

Direct Marketing

• Identifies list of potential customer

• Sends them promotional material & special offers by email/ letters

• ‘Junk mail’

Aim: To create and maintain a good image of the firm & its products

PRO: Public relations officer

How?

Press Relations: News items about the company

Press conference: Meetings arranged by the company, reporters can ask questions

Sponsorships: Arrangement where the company pays money so that their company name/ logo can be associated with that event/ team

Charity donations: Good for image of the business.

Question Evaluate the elements of the marketing mix, using a product or

service of your choice. (30 Marks)

Solution: Choose productStep 1: Define Marketing Mix & benefit of planning it.Step 2: Product

- Core/ augmented/ USP- Design- Brand – benefits of brand name- Product life cycle –Maturity stage

Step 3: Price - What will price effect

- Price strategy – why choose thisStep 4: Place

- Define Chanel of Distribution- Choose channel; Id benefits of it

Step 5: Promotion- Define- Benefits of PR- Choose medium – Link to target market